(c) Default has the same meaning as provided under
section 3(x) of the Act (12 U.S.C.
1813(x)).

(d) Deposit has the same meaning as provided under
section 3(l) of the Act (12
U.S.C. 1813(l)).

(e) Deposit account records means account ledgers,
signature cards, certificates of deposit, passbooks, corporate
resolutions authorizing accounts in the possession of the insured
depository institution and other books and records of the insured
depository institution, including records maintained by computer, which
relate to the insured depository institution's deposit taking function,
but does not mean account statements, deposit slips, items deposited or
cancelled checks.

(f) FDIC means the Federal Deposit Insurance
Corporation.

(g) Independent activity. A corporation, partnership or
unincorporated association shall be deemed to be engaged in an
"independent activity" if the entity is operated primarily for
some purpose other than to increase deposit insurance.

(h) Insured branch means a branch of a foreign bank any
deposits in which are insured in accordance with the provisions of the
Act.

(i) Insured deposit has the same meaning as that
provided under subsection 3(m)(1) of the Act
(12 U.S.C. 1813(m)(1)).

(j) Insured depository institution is any depository
institution whose deposits are insured pursuant to the Act, including a
foreign bank having an insured branch.

(k) Interest, with respect to a deposit, means any
payment to or for the account of any depositor as compensation for the
use of funds constituting a deposit. A bank's absorption of expenses
incident to providing a normal banking function or its forbearance from
charging a fee in connection with such a service is not considered a
payment of interest.

(l) Natural person means a human being.

(m) Non-contingent trust interest means a trust interest
capable of determination without evaluation of contingencies except for
those covered by the present worth tables and rules of calculation for
their use set forth in § 20.2031--7 of the Federal Estate Tax
Regulations (26 CFR 20.2031--7) or any similar present worth or life
expectancy tables which may be adopted by the Internal Revenue
Service.

(n) Sole proprietorship means a form of business in
which one person owns all the assets of the business, in contrast to a
partnership or corporation.

(p) Trust estate means the determinable and beneficial
interest of a beneficiary or principal in trust funds but does not
include the beneficial interest of an heir or devisee in a decedent's
estate.

(q) Trust funds means funds held by an insured
depository institution as trustee pursuant to any irrevocable trust
established pursuant to any statute or written trust agreement.

(r) Trust interest means the interest of a beneficiary
in an irrevocable express trust (other than an employee benefit plan)
created either by written trust instrument or by statute, but does not
include any interest retained by the settlor.

(2) On which the depositor or account holder is permitted to make
withdrawals by negotiable or transferable instrument, payment orders of
withdrawal, telephone or other electronic media transfers, or other
similar items for the purpose of making payments or transfers to third
parties or others; and

(3) On which the insured depository institution does not reserve
the right to require advance notice of an intended withdrawal.

The purpose of this part is to clarify the rules and define the
terms necessary to afford deposit insurance coverage under the Act and
provide rules for the recognition of deposit ownership in various
circumstances.

(a) Ownership rights and capacities. The insurance
coverage provided by the Act and this part is based upon the ownership
rights and capacities in which deposit accounts are maintained at
insured depository institutions. All deposits in an insured depository
institution which are maintained in the same right and capacity (by or
for the benefit of a particular depositor or depositors) shall be added
together and insured in accordance with this part. Deposits maintained
in different rights and capacities, as recognized under this part,
shall be insured separately from each other. (Example: Single ownership
accounts and joint ownership accounts are insured separately from each
other.)

(b) Deposits maintained in separate insured depository
institutions or in separate branches of the same insured depository
institution. Any deposit accounts maintained by a depositor at
one insured depository institution are insured separately from, and
without regard to, any deposit accounts that the same depositor
maintains at any other separately chartered and insured depository
institution, even if two or more separately chartered and insured
depository institutions are affiliated through common ownership.
(Example: Deposits held by the same individual at two different banks
owned by the same bank holding company would be insured separately, per
bank.) The deposit accounts of a depositor maintained in the same right
and capacity at different branches or offices of the same insured
depository institution are not separately insured; rather they shall be
added together and insured in accordance with this part.

(c) Deposits maintained by foreigners and deposits
denominated in foreign currency. The availability of deposit
insurance is not limited to citizens and residents of the United
States. Any person or entity that maintains deposits in an insured
depository institution is entitled to the deposit insurance provided by
the Act and this part. In addition, deposits denominated in a foreign
currency shall be insured in accordance with this part. Deposit
insurance for such deposits shall be determined and paid in the amount
of United States dollars that is equivalent in value to the amount of
the deposit denominated in the foreign currency as of close of business
on the date of default of the insured depository institution. The
exchange rates to be used for such conversions are the 12 PM rates (the
"noon buying rates for cable transfers") quoted for major
currencies by the Federal Reserve Bank of New York on the date of
default of the insured depository institution, unless the deposit
agreement specifies that some other widely recognized exchange rates
are to be used for all purposes under that agreement, in which case,
the rates so specified shall be used for such conversions.

(d) Deposits in insured branches of foreign
banks. Deposits in an insured branch of a foreign bank which are
payable by contract in the United States shall be insured in accordance
with this part, except that any deposits to the credit of the foreign
bank, or any office, branch, agency or any wholly owned subsidiary of
the foreign bank, shall not be insured. All deposits held by a
depositor in the same right and capacity in more than one insured
branch of the same foreign bank shall be added together for the purpose
of determining the amount of deposit insurance.

(e) Deposits payable solely outside of the United States and
certain other locations. Any obligation of an insured depository
institution which is payable solely at an office of such institution
located outside the States of the United States, the District of
Columbia, Puerto Rico, Guam, the Commonwealth of the Northern Mariana
Islands, American Samoa, the Trust Territory of the Pacific Islands,
and the Virgin Islands, is not a deposit for the purposes of this part.

(f) International banking facility deposits. An
"international banking facility time deposit," as defined by the
Board of Governors of the Federal Reserve System in Regulation D
(12 CFR 204.8(a)(2)), or in any
successor regulation, is not a deposit for the purposes of this part.

(g) Bank investment contracts. As required by section
11(a)(8) of the Act (12 U.S.C.
1821(a)(8)), any liability arising under any investment
contract between any insured depository institution and any employee
benefit plan which expressly permits "benefit responsive withdrawals
or transfers" (as defined in section 11(a)(8) of the Act) are not
insured deposits for purposes of this part. The term "substantial
penalty or adjustment" used in section 11(a)(8) of the Act means, in
the case of a deposit having an original term which exceeds one year,
all interest earned on the amount withdrawn from the date of deposit or
for six months, whichever is less; or, in the case of a deposit having
an original term of one year or less, all interest earned on the amount
withdrawn from the date of deposit or three months, whichever is less.

(h) Application of state or local law to deposit insurance
determinations. In general, deposit insurance is for the benefit
of the owner or owners of funds on deposit. However, while ownership
under state law of deposited funds is a necessary condition for deposit
insurance, ownership under state law is not sufficient for, or decisive
in, determining deposit insurance coverage. Deposit insurance coverage
is also a function of the deposit account records of the insured
depository institution and of the provisions of this part, which, in
the interest of uniform national rules for deposit insurance coverage,
are controlling for purposes of determining deposit insurance coverage.

(i) Determination of the amount of a
deposit--(1) General rule. The amount of a deposit
is the balance of principal and interest unconditionally credited to
the deposit account as of the date of default of the insured depository
institution, plus the ascertainable amount of interest to that date,
accrued at the contract rate (or the anticipated or announced interest
or dividend rate), which the insured depository institution in default
would have paid if the deposit had matured on that date and the insured
depository institution had not failed. In the absence of any such
announced or anticipated interest or dividend rate, the rate for this
purpose shall be whatever rate was paid in the immediately preceding
payment period.

(2) Discounted certificates of deposit. The amount of
a certificate of deposit sold by an insured depository institution at a
discount from its face value is its original purchase price plus the
amount of accrued earnings calculated by compounding interest annually
at
the rate necessary to
increase the original purchase price to the maturity value over the
life of the certificate.

(3) Waiver of minimum requirements. In the case of a
deposit with a fixed payment date, fixed or minimum term, or a
qualifying or notice period that has not expired as of such date,
interest thereon to the date of closing shall be computed according to
the terms of the deposit contract as if interest had been credited and
as if the deposit could have been withdrawn on such date without any
penalty or reduction in the rate of earnings.

(j) Continuation of insurance coverage following the death of
a deposit owner. The death of a deposit owner shall not affect the
insurance coverage of the deposit for a period of six months following
the owner's death unless the deposit account is restructured. The
operation of this grace period, however, shall not result in a
reduction of coverage. If an account is not restructured within six
months after the owner's death, the insurance shall be provided on the
basis of actual ownership in accordance with the provisions of
§ 330.5(a)(1).

Whenever the liabilities of one or more insured depository
institutions for deposits are assumed by another insured depository
institution, whether by merger, consolidation, other statutory
assumption or contract:

(a) The insured status of the institutions whose liabilities have
been assumed terminates on the date of receipt by the FDIC of
satisfactory evidence of the assumption; and

(b) The separate insurance of deposits assumed continues for six
months from the date the assumption takes effect or, in the case of a
time deposit, the earliest maturity date after the six-month period. In
the case of time deposits which mature within six months of the date
the deposits are assumed and which are renewed at the same dollar
amount (either with or without accrued interest having been added to
the principal amount) and for the same term as the original deposit,
the separate insurance applies to the renewed deposits until the first
maturity date after the six-month period. Time deposits that mature
within six months of the deposit assumption and that are renewed on any
other basis, or that are not renewed and thereby become demand
deposits, are separately insured only until the end of the six-month
period.

(a) Recognition of deposit
ownership--(1) Evidence of deposit ownership. Except
as indicated in this paragraph (a)(1) or as provided in § 330.3(j),
in determining the amount of insurance available to each depositor, the
FDIC shall presume that deposited funds are actually owned in the
manner indicated on the deposit account records of the insured
depository institution. If the FDIC, in its sole discretion, determines
that the deposit account records of the insured depository institution
are clear and unambiguous, those records shall be considered binding on
the depositor, and the FDIC shall consider no other records on the
manner in which the funds are owned. If the deposit account records are
ambiguous or unclear on the manner in which the funds are owned, then
the FDIC may, in its sole discretion, consider evidence other than the
deposit account records of the insured depository institution for the
purpose of establishing the manner in which the funds are owned.
Despite the general requirements of this paragraph (a)(1), if the FDIC
has reason to believe that the insured depository institution's
deposit account records misrepresent the actual ownership of deposited
funds and such misrepresentation would increase deposit insurance
coverage, the FDIC may consider all available evidence and pay claims
for insured deposits on the basis of the actual rather than the
misrepresented ownership.

(2) Recognition of deposit ownership in custodial
accounts. In the case of custodial deposits, the interest of each
beneficial owner may be determined on a fractional or percentage basis.
This may be accomplished in any manner which indicates that where the
funds of an owner are commingled with other funds held in a custodial
capacity and a portion thereof is placed on deposit in one or more
insured depository institutions without allocation, the owner's
insured interest in the deposit in any one insured depository
institution would represent, at any given time the same fractional
share as his or her share of the total commingled funds.

(b) Fiduciary relationships--(1) Recognition.
The FDIC will recognize a claim for insurance coverage based on a
fiduciary relationship only if the relationship is expressly disclosed,
by way of specific references, in the "deposit account records"
(as defined in § 330.1(e)) of the insured depository institution.
Such relationships include, but are not limited to, relationships
involving a trustee, agent, nominee, guardian, executor or custodian
pursuant to which funds are deposited. The express indication that the
account is held in a fiduciary capacity will not be necessary, however,
in instances where the FDIC determines, in its sole discretion, that
the titling of the deposit account and the underlying deposit account
records sufficiently indicate the existence of a fiduciary
relationship. This exception may apply, for example, where the deposit
account title or records indicate that the account is held by an escrow
agent, title company or a company whose business is to hold deposits
and securities for others.

(2) Details of fiduciary relationships. If the deposit
account records of an insured depository institution disclose the
existence of a relationship which might provide a basis for additional
insurance (including the exception provided for in paragraph (b)(1) of
this section), the details of the relationship and the interests of
other parties in the account must be ascertainable either from the
deposit account records of the insured depository institution or from
records maintained, in good faith and in the regular course of
business, by the depositor or by some person or entity that has
undertaken to maintain such records for the depositor.

(3) Multi-tiered fiduciary relationships. In deposit
accounts where there are multiple levels of fiduciary relationships,
there are two methods of satisfying paragraphs (b)(1) and (b)(2) of
this section to obtain insurance coverage for the interests of the true
beneficial owners of a deposit account.

(i) One method is to:

(A) Expressly indicate, on the deposit account records of the
insured depository institution, the existence of each and every level
of fiduciary relationships; and

(B) Disclose, at each level, the name(s) and interest(s) of the
person(s) on whose behalf the party at the level is acting.

(ii) An alternative method is to:

(A) Expressly indicate, on the deposit account records of the
insured depository institution, that there are multiple levels of
fiduciary relationships;

(B) Disclose the existence of additional levels of fiduciary
relationships in records, maintained in good faith and in the regular
course of business, by parties at subsequent levels; and

(C) Disclose, at each of the levels, the name(s) and interest(s)
of the person(s) on whose behalf the party at that level is acting. No
person or entity in the chain of parties will be permitted to claim
that they are acting in a fiduciary capacity for others unless the
possible existence of such a relationship is revealed at some previous
level in the chain.

(4) Exceptions--(i) Deposits evidenced by
negotiable instruments. If any deposit obligation of an insured
depository institution is evidenced by a negotiable certificate of
deposit, negotiable draft, negotiable cashier's or officer's check,
negotiable certified check, negotiable traveler's check, letter of
credit or other negotiable instrument, the FDIC will recognize the
owner of such deposit obligation for all purposes of claim for insured
deposits to the same extent as if his or her name and interest were
disclosed on the records of the insured depository institution;
provided, that the instrument was in fact negotiated to such owner
prior to the date of default of the insured depository institution. The
owner must provide affirmative proof of such negotiation, in a form
satisfactory to the FDIC, to substantiate his or her claim. Receipt of
a negotiable instrument directly from the insured
depository institution in
default shall, in no event, be considered a negotiation of said
instrument for purposes of this provision.

(ii) Deposit obligations for payment of items forwarded for
collection by depository institution acting as agent. Where an
insured depository institution in default has become obligated for the
payment of items forwarded for collection by a depository institution
acting solely as agent, the FDIC will recognize the holders of such
items for all purposes of claim for insured deposits to the same extent
as if their name(s) and interest(s) were disclosed as depositors on the
deposit account records of the insured depository institution, when
such claim for insured deposits, if otherwise payable, has been
established by the execution and delivery of prescribed forms. The FDIC
will recognize such depository institution forwarding such items for
the holders thereof as agent for such holders for the purpose of making
an assignment to the FDIC of their rights against the insured
depository institution in default and for the purpose of receiving
payment on their behalf.

(a) Individual accounts. Funds owned by a natural person
and deposited in one or more deposit accounts in his or her own name
shall be added together and insured up to the SMDIA in the aggregate.
Exception: Despite the general requirement in this paragraph (a), if
more than one natural person has the right to withdraw funds from an
individual account (excluding persons who have the right to withdraw by
virtue of a Power of Attorney), the account shall be treated as a joint
ownership account (although not necessarily a qualifying joint account)
and shall be insured in accordance with the provisions of § 330.9,
unless the deposit account records clearly indicate, to the
satisfaction of the FDIC, that the funds are owned by one individual
and that other signatories on the account are merely authorized to
withdraw funds on behalf of the owner.

(b) Sole proprietorship accounts. Funds owned by a
business which is a "sole proprietorship" (as defined in
§ 330.1(n)) and deposited in one or more deposit accounts in the name
of the business shall be treated as the individual account(s) of the
person who is the sole proprietor, added to any other individual
accounts of that person, and insured up to the SMDIA in the aggregate.

(c) Single-name accounts containing community property
funds. Community property funds deposited into one or more deposit
accounts in the name of one member of a husband-wife community shall be
treated as the individual account(s) of the named member, added to any
other individual accounts of that person, and insured up to the SMDIA
in the aggregate.

(d) Accounts of a decedent and accounts held by executors or
administrators of a decedent's estate. Funds held in the name of
a decedent or in the name of the executor, administrator, or other
personal representative of his or her estate and deposited into one or
more deposit accounts shall be added together and insured up to the
SMDIA in the aggregate; provided, however, that nothing in this
paragraph (d) shall affect the operation of § 330.3(j). The deposit
insurance provided by this paragraph (d) shall be separate from an
insurance coverage provided for the individual deposit accounts of the
executor, administrator, other personal representative or the
beneficiaries of the estate.

§ 330.7 Accounts held by an agent, nominee, guardian, custodian
or conservator.

(a) Agency or nominee accounts. Funds owned by a
principal or principals and deposited into one or more deposit accounts
in the name of an agent, custodian or nominee, shall be insured to the
same extent as if deposited in the name of the principal(s). When such
funds are deposited by an insured depository institution acting as a
trustee of an irrevocable trust, the insurance coverage shall be
governed by the provisions of § 330.13.

(b) Guardian, custodian or conservator accounts. Funds
held by a guardian, custodian, or conservator for the benefit of his or
her ward, or for the benefit of a minor under the Uniform Gifts to
Minors Act, and deposited into one or more accounts in the name of the
guardian, custodian or conservator shall, for purposes of this part, be
deemed to be agency or nominee accounts and shall be insured in
accordance with paragraph (a) of this section.

(c) Accounts held by fiduciaries on behalf of two or more
persons. Funds held by an agent, nominee, guardian, custodian,
conservator or loan servicer, on behalf of two or more persons jointly,
shall be treated as a joint ownership account and shall be insured in
accordance with the provisions of § 330.9.

(d) Mortgage servicing accounts. Accounts maintained by
a mortgage servicer, in a custodial or other fiduciary capacity, which
are comprised of payments by mortgagors of principal and interest,
shall be insured for the cumulative balance paid into the account by
the mortgagors, up to the limit of the SMDIA per mortgagor. Accounts
maintained by a mortgage servicer, in a custodial or other fiduciary
capacity, which are comprised of payments by mortgagors of taxes and
insurance premiums shall be added together and insured in accordance
with paragraph (a) of this section for the ownership interest of each
mortgagor in such accounts. This provision is effective as of October
10, 2008, for all existing and future mortgage servicing accounts.

(e) Custodian accounts for American Indians. Paragraph
(a) of this section shall not apply to any interest an individual
American Indian may have in funds deposited by the Bureau of Indian
Affairs of the United States Department of the Interior (the
"BIA") on behalf of that person pursuant to 25 U.S.C. 162(a), or
by any other disbursing agent of the United States on behalf of that
person pursuant to similar authority, in an insured depository
institution. The interest of each American Indian in all such accounts
maintained at the same insured depository institution shall be added
together and insured, up to the SMDIA, separately from any other
accounts maintained by that person in the same insured depository
institution.

(a) Funds held by an insurance company or other corporation in a
deposit account for the sole purpose of funding life insurance or
annuity contracts and any benefits incidental to such contracts, shall
be insured separately in the amount of up to the SMDIA per annuitant,
provided that, pursuant to a state statute:

(1) The corporation establishes a separate account for such
funds;

(2) The account cannot be charged with the liabilities arising
out of any other business of the corporation; and

(3) The account cannot be invaded by other creditors of the
corporation in the event that the corporation becomes insolvent and its
assets are liquidated.

(b) Such insurance coverage shall be separate from the insurance
provided for any other accounts maintained by the corporation or the
annuitants at the same insured depository institution.

(a) Separate insurance coverage. Qualifying joint
accounts, whether owned as joint tenants with right of survivorship, as
tenants in common or as tenants by the entirety, shall be insured
separately from any individually owned (single ownership) deposit
accounts maintained by the co-owners. (Example: If A has a single
ownership account and also is a joint owner of a qualifying joint
account, A's interest in the joint account would be insured separately
from his or her interest in the individual account.) Qualifying joint
accounts in the names of both husband and wife which are comprised of
community property funds shall be added together and insured up to
twice the SMDIA, separately from any funds deposited into accounts
bearing their individual names.

(b) Determination of insurance coverage. The interests
of each co-owner in all qualifying joint accounts shall be added
together and the total shall be insured up to the SMDIA. (Example:
"A&B" have a qualifying joint account with a balance of $150,000;
"A&C" have a qualifying joint account with a balance of $200,000;
and "A&B&C" have a qualifying joint account with a balance of
$375,000. A's combined ownership interest in all qualifying joint
accounts would be $300,000 ($75,000 plus $100,000 plus $125,000);
therefore, A's interest would be insured in the amount of $250,000 and
uninsured in the amount of $50,000. B's combined ownership interest in
all qualifying joint accounts would be $200,000 ($75,000 plus
$125,000); therefore, B's interest would be fully insured. C's
combined ownership interest in all qualifying joint accounts would be
$225,000 ($100,000 plus $125,000); therefore, C's interest would be
fully insured.

(c) Qualifying joint accounts. (1) A joint deposit
account shall be deemed to be a qualifying joint account, for purposes
of this section, only if:

(i) All co-owners of the funds in the account are "natural
persons" (as defined in § 330.1(l)); and

(ii) Each co-owner has personally signed a deposit account
signature card; and

(iii) Each co-owner possesses withdrawal rights on the same
basis.

(2) The signature-card requirement of paragraph (c)(1)(ii) of
this section shall not apply to certificates of deposit, to any deposit
obligation evidenced by a negotiable instrument, or to any account
maintained by an agent, nominee, guardian, custodian or conservator on
behalf of two or more persons.

(3) All deposit accounts that satisfy the criteria in paragraph
(c)(1) of this section, and those accounts that come within the
exception provided for in paragraph (c)(2) of this section, shall be
deemed to be jointly owned provided that, in accordance with the
provisions of § 330.5(a), the FDIC determines that the deposit
account records of the insured depository institution are clear and
unambiguous as to the ownership of the accounts. If the deposit account
records are ambiguous or unclear as to the manner in which the deposit
accounts are owned, then the FDIC may, in its sole discretion, consider
evidence other than the deposit account records of the insured
depository institution for the purpose of establishing the manner in
which the funds are owned. The signatures of two or more persons on the
deposit account signature card or the names of two or more persons on a
certificate of deposit or other deposit instrument shall be conclusive
evidence that the account is a joint account (although not necessarily
a qualifying joint account) unless the deposit records as a whole are
ambiguous and some other evidence indicates, to the satisfaction of the
FDIC, that there is a contrary ownership capacity.

(d) Nonqualifying joint accounts. A deposit account held
in two or more names which is not a qualifying joint account, for
purposes of this section, shall be treated as being owned by each named
owner, as an individual, corporation, partnership, or unincorporated
association, as the case may be, and the actual ownership interest of
each individual or entity in such account shall be added to any other
single ownership accounts of such individual or other accounts of such
entity, and shall be insured in accordance with the provisions of this
part governing the insurance of such accounts.

(e) Determination of interests. The interests of the
co-owners of qualifying joint accounts, held as tenants in common,
shall be deemed equal, unless otherwise stated in the
depository institution's deposit account records.
This section applies regardless of whether the conjunction "and"
or "or" is used in the title of a joint deposit account, even
when both terms are used, such as in the case of a joint deposit
account with three or more co-owners.

(a) General rule. Except as provided in paragraph (e) of
this section, the funds owned by an individual and deposited into one
or more accounts with respect to which the owner evidences an intention
that upon his or her death the funds shall belong to one or more
beneficiaries shall be separately insured (from other types of accounts
the owner has at the same insured depository institution) in an amount
equal to the total number of different beneficiaries named in the
account(s) multiplied by the SMDIA. This section applies to all
accounts held in connection with informal and formal testamentary
revocable trusts. Such informal trusts are commonly referred to as
payable-on-death accounts, in-trust-for accounts or Totten Trust
accounts, and such formal trusts are commonly referred to as living
trusts or family trusts. (Example 1: Account Owner "A"
has a living trust account with four different beneficiaries named in
the trust. A has no other revocable trust accounts at the same
FDIC-insured institution. The maximum insurance coverage would be
$1,000,000, determined by multiplying 4 times $250,000 (the number of
beneficiaries times the SMDIA). (Example 2: Account Owner
"A" has a payable-on-death account naming his niece and cousin as
beneficiaries, and A also has, at the same FDIC-insured institution,
another payable-on-death account naming the same niece and a friend as
beneficiaries. The maximum coverage available to the account owner
would be $750,000. This is because the account owner has named only
three different beneficiaries in the revocable trust
accounts--his niece and cousin in the first, and the same niece and a
friend in the second. The naming of the same beneficiary in more than
one revocable trust account, whether it be a payable-on-death account
or living trust account, does not increase the total coverage amount.)
(Example 3: Account Owner "A" establishes a living
trust account, with a balance of $300,000, naming his two children
"B" and "C" as beneficiaries. A also establishes, at the
same FDIC-insured institution, a payable-on-death account, with a
balance of $300,000, also naming his children B and C as beneficiaries.
The maximum coverage available to A is $500,000, determined by
multiplying 2 times $250,000 (the number of different beneficiaries
times the SMDIA). A is uninsured in the amount of $100,000. This is
because all funds that a depositor holds in both living trust accounts
and payable-on-death accounts, at the same FDIC-insured institution and
naming the same beneficiaries, are aggregated for insurance purposes
and insured to the applicable coverage limits.)

(b) Required intention and naming of beneficiaries. (1)
The required intention in paragraph (a) of this section that upon the
owner's death the funds shall belong to one or more beneficiaries must
be manifested in the "title" of the account using commonly
accepted terms such as, but not limited to, "in trust for,"
"as trustee for," "payable-on-death to," or any acronym
therefore. For purposes of this requirement, "title" includes the
electronic deposit account records of the institution. (For example,
the FDIC would recognize an account as a revocable trust account even
if the title of the account signature card does not designate the
account as a revocable trust account as long as the institution's
electronic deposit account records identify (through a code or
otherwise) the account as a revocable trust account.) The settlor of a
revocable trust shall be presumed to own the funds deposited into the
account.

(2) For informal revocable trust accounts, the beneficiaries must
be specifically named in the deposit account records of the insured
depository institution.

(c) Definition of beneficiary. For purposes of this
section, a beneficiary includes a natural person as well as a
charitable organization and other non-profit entity recognized as such
under the Internal Revenue Code of 1986, as amended.

(d) Interests of beneficiaries outside the definition of
beneficiary in this section. If a beneficiary named in a trust
covered by this section does not meet the definition of beneficiary in
paragraph (c) of this section, the funds corresponding to that
beneficiary shall be treated as the individually owned (single
ownership) funds of the owner(s). As such, they shall be aggregated
with any other single ownership accounts of such owner(s) and insured
up to the SMDIA per owner. (Example: Account Owner "A"
establishes a payable-on-death account naming a pet as beneficiary with
a balance of $100,000. A also has an individual account at the same
FDIC-insured institution with a balance of $175,000. Because the pet is
not a "beneficiary," the two accounts are aggregated and treated
as a single ownership account. As a result, A is insured in the amount
of $250,000, but is uninsured for the remaining $25,000.)

(e) Revocable trust accounts with aggregate balances
exceeding five times the SMDIA and naming more than five different
beneficiaries. Notwithstanding the general coverage provisions in
paragraph (a) of this section, for funds owned by an individual in one
or more revocable trust accounts naming more than five different
beneficiaries and whose aggregate balance is more than five times the
SMDIA, the maximum revocable trust account coverage for the account
owner shall be the greater of either: five times the SMDIA or the
aggregate amount of the interests of each different beneficiary named
in the trusts, to a limit of the SMDIA per different beneficiary.
(Example 1: Account Owner "A" has a living trust with
a balance of $1 million and names two friends, "B" and "C"
as beneficiaries. At the same FDIC-insured institution, A establishes a
payable-on-death account, with a balance of $1 million naming his two
cousins, "D" and "E" as beneficiaries. Coverage is
determined under the general coverage provisions in paragraph (a) of
this section, and not this paragraph (e). This is because all funds
that A holds in both living trust accounts and payable-on-death
accounts, at the same FDIC-insured institution, are aggregated for
insurance purposes. Although A's aggregated balance of $2 million is
more than five times the SMDIA, A names only four different
beneficiaries, and coverage under this paragraph (e) applies only if
there are more than five different beneficiaries. A is insured in the
amount of $1 million (4 beneficiaries times the SMDIA), and uninsured
for the remaining $1 million.) (Example 2: Account Owner
"A" has a living trust account with a balance of $1,500,000.
Under the terms of the trust, upon A's death, A's three children are
each entitled to $125,000, A's friend is entitled to $15,000, and a
designated charity is entitled to $175,000. The trust also provides
that the remainder of the trust assets shall belong to A's spouse. In
this case, because the balance of the account exceeds $1,250,000 (5
times the SMDIA) and there are more than five different beneficiaries
named in the trust, the maximum coverage available to A would be
greater of: $1,250,000 or the aggregate of each different
beneficiary's interest to a limit of $250,000 per beneficiary. The
beneficial interests in the trust for purposes of determining coverage
are: $125,000 for each of the children (totaling $375,000), $15,000 for
the friend, $175,000 for the charity, and $250,000 for the spouse
(because the spouse's $935,000 is subject to the $250,000
per-beneficiary limitation). The aggregate beneficial interests total
$815,000. Thus, the maximum coverage afforded to the account owner
would be $1,250,000, the greater of $1,250,000 or $815,000.)

(f) Co-owned revocable trust accounts. (1) Where an
account described in paragraph (a) of this section is established by
more than one owner, the respective interest of each account owner
(which shall be deemed equal) shall be insured separately, per
different beneficiary, up to the SMDIA, subject to the limitation
imposed in paragraph (e) of this section. (Example 1: A and
B, two individuals, establish a payable-on-death account naming their
three nieces as beneficiaries. Neither A nor B has any other revocable
trust accounts at the same FDIC-insured institution. The maximum
coverage afforded to A and B would be $1,500,000, determined by
multiplying the number of owners (2) times the SMDIA ($250,000) times
the number of different beneficiaries (3). In this example, A would
be
entitled to revocable trust coverage of $750,000
and B would be entitled to revocable trust coverage of $750,000.)
(Example 2: A and B, two individuals, establish a
payable-on-death account naming their two children, two cousins, and a
charity as beneficiaries. The balance in the account is $1,750,000.
Neither An nor B has any other revocable trust accounts at the same
FDIC-insured institution. The maximum coverage would be determined
(under paragraph (a) of this section) by multiplying the number of
account owners (2) times the number of different beneficiaries (5)
times $250,000, totaling $2,500,000. Because the account balance
($1,750,000) is less than the maximum coverage amount ($2,500,000), the
account would be fully insured.) (Example 3: A and B, two
individuals, establish a living trust account with a balance of $3.75
million. Under the terms of the trust, upon the death of both A and B,
each of their three children is entitled to $600,000, B's cousin is
entitled to $380,000, A's friend is entitled to $70,000, and the
remaining amount ($1,500,000) goes to a charity. Under paragraph (e) of
this section, the maximum coverage, as to each co-owned account owner,
would be the greater of $1,250,000 or the aggregate amount (as to each
co-owner) of the interest of each different beneficiary named in the
trust, to a limit of $250,000 per account owner per beneficiary. The
beneficial interests in the trust considered for purposes of
determining coverage for account owner A are: $750,000 for
the children (each child's interest attributable to A, $300,000, is
subject to the $250,000-per-beneficiary limitation), $190,000 for the
cousin, $35,000 for the friend, and $250,000 for the charity (the
charity's interest attributable to A, $750,000, is subject to the
$250,000 per-beneficiary limitation). As to A, the aggregate amount of
the beneficial interests eligible for deposit insurance coverage totals
$1,225,000. Thus, the maximum coverage afforded to account co-owner A
would be $1,250,000, which is the greater of $1,250,000 or the
aggregate of all the beneficial interests attributable to A (limited to
$250,000 per beneficiary), which totaled slightly less at $1,225,000.
Because B has equal ownership interest in the trust, the same analysis
and coverage determination also would apply to B. Thus, of the total
account balance of $3.75 million, $2.5 million would be insured and
$1.25 million would be uninsured.)

(2) Notwithstanding paragraph (f)(1) of this section, where the
owners of a co-owned revocable trust account are themselves the sole
beneficiaries of the corresponding trust, the account shall be insured
as a joint account under § 330.9 and shall not be insured under the
provisions of this section. (Example: If A and B establish a
payable-on-death account naming themselves as the sole beneficiaries of
the account, the account will be insured as a joint account because the
account does not satisfy the intent requirement (under paragraph (a) of
this section) and the funds in the account belong to the named
beneficiaries upon the owners' death. The beneficiaries are in fact
the actual owners of the funds during the account owners' lifetimes.)

(g) For deposit accounts held in connection with a living trust
that provides for a life-estate interest for designated beneficiaries,
the FDIC shall value each such life estate interest as the SMDIA for
purposes of determining the insurance coverage available to the account
owner under paragraph (e) of this section. (Example: Account
Owner "A" has a living trust account with a balance of
$1,500,000. Under the terms of the trust, A provides a life estate
interest for his spouse. Moreover, A's three children are each
entitled to $275,000, A's friend is entitled to $15,000, and a
designated charity is entitled to $175,000. The trust also provides
that the remainder of the trust assets shall belong to A's
granddaughter. In this case, because the balance of the account exceeds
$1,250,000((5) five times the SMDIA) and there are more than five
different beneficiaries named in the trust, the maximum coverage
available to A would be the greater of: $1,250,000 or the aggregate of
each different beneficiary's interest to a limit of $250,000 per
beneficiary. The beneficial interests in the trust considered for
purposes of determining coverage are: $250,000 for the spouse's life
estate, $750,000 for the children (because each child's $275,000 is
subject to the $250,000 per-beneficiary limitation), $15,000 for the
friend, $175,000 for the charity, and $250,000 for the granddaughter
(because the granddaughter's $310,000 remainder is limited by the
$250,000 per-beneficiary limitation). The aggregate beneficial
interests total $1,440,000. Thus, the maximum coverage afforded to the
account owner would be $1,440,000, the greater of $1,250,000 or
$1,440,000.)

(h) Revocable trusts that become irrevocable trusts.
Notwithstanding the provisions in section 330.13 on the insurance
coverage of irrevocable trust accounts, if a revocable trust account
converts in part or entirely to an irrevocable trust upon the death of
one or more of the trust's owners, the trust account shall continue to
be insured under the provisions of this section. (Example:
Assume A and B have a trust account in connection with a living trust,
of which they are joint grantors. If upon the death of either A or B
the trust transforms into an irrevocable trust as to the deceased
grantor's ownership in the trust, the account will continue to be
insured under the provisions of this section.)

§ 330.11 Accounts of a corporation, partnership or
unincorporated association.

(a) Corporate accounts. (1) The deposit accounts of a
corporation engaged in any "independent activity" (as defined in
§ 330.1(g)) shall be added together and insured up to the SMDIA in
the aggregate. If a corporation has divisions or units which are not
separately incorporated, the deposit accounts of those divisions or
units shall be added to any other deposit accounts of the corporation.
If a corporation maintains deposit accounts in a representative or
fiduciary capacity, such accounts shall not be treated as the deposit
accounts of the corporation but shall be treated as fiduciary accounts
and insured in accordance with the provisions of § 330.7.

(2) Notwithstanding any other provision of this part, any trust
or other business arrangement which has filed or is required to file a
registration statement with the Securities and Exchange Commission
pursuant to section 8 of the Investment Company Act of 1940
(15 U.S.C. 80a-8) or that would
be required so to register but for the fact it is not created under the
laws of the United States or a state or but for sections 2(b), 3(c)(1),
or 6(a)(1) of that act shall be deemed to be a corporation for purposes
of determining deposit insurance coverage. An exception to this
paragraph (a)(2) shall exist for any trust or other business
arrangement established by a state or that is a state agency or state
public instrumentality as part of a qualified tuition savings program
under section 529 of the Internal Revenue Code (26 U.S.C. 529)), A
deposit account of such a trust or business arrangement shall not be
deemed to be the deposit of a corporation provided that: The funds in
the account may be traced to one or more particular investors or
participants; and the existence of the trust relationships is disclosed
in accordance with the requirements of § 330.5. If these conditions
are satisfied, each participant's funds shall be insured as a deposit
account of the participant.

(b) Partnership accounts. The deposit accounts of a
partnership engaged in any "independent activity" (as defined in
§ 330.1(g)) shall be added together and insured up to the SMDIA in
the aggregate. Such insurance coverage shall be separate from any
insurance provided for individually owned (single ownership) accounts
maintained by the individual partners. A partnership shall be deemed to
exist, for purposes of this paragraph, any time there is an association
of two or more persons or entities formed to carry on, as co-owners, an
unincorporated business for profit.

(c) Unincorporated association accounts. The deposit
accounts of an unincorporated association engaged in any independent
activity shall be added together and insured up to the SMDIA in the
aggregate, separately from the accounts of the person(s) or entity(ies)
comprising the unincorporated association. An unincorporated
association shall be deemed to exist, for purposes of this paragraph,
whenever there is an association of two or more persons formed for some
religious, educational, charitable, social or other noncommercial
purpose.

(d) Non-qualifying entities. The deposit accounts of an
entity which is not engaged in an "independent activity" (as
defined in § 330.1(g)) shall be deemed to be owned by the person or
persons owning the corporation or comprising the partnership or
unincorporated association, and, for deposit insurance purposes, the
interest of each person in such a deposit account shall be added to any
other deposit accounts individually owned by that person and insured up
to the SMDIA in the aggregate.

§ 330.12 Accounts held by a depository institution as the
trustee of an irrevocable trust.

(a) Separate insurance coverage. "Trust funds" (as
defined in § 330.1(q)) held by an insured depository institution in
its capacity as trustee of an irrevocable trust, whether held in its
trust department, held or deposited in any other department of the
fiduciary institution, or deposited by the fiduciary institution in
another insured depository institution, shall be insured up to the
SMDIA for each owner or beneficiary represented. This insurance shall
be separate from, and in addition to, the insurance provided for any
other deposits of the owners or the beneficiaries.

(b) Determination of interests. The insurance for funds
held by an insured depository institution in its capacity as trustee of
an irrevocable trust shall be determined in accordance with the
following provisions:

(1) Allocated funds of a trust estate. If trust funds
of a particular "trust estate" (as defined in § 330.1(o)) are
allocated by the fiduciary and deposited, the insurance with respect to
such trust estate shall be determined by ascertaining the amount of its
funds allocated, deposited and remaining to the credit of the claimant
as fiduciary at the insured depository institution in default.

(2) Interest of a trust estate in unallocated trust
funds. If funds of a particular trust estate are commingled with
funds of other trust estates and deposited by the fiduciary institution
in one or more insured depository institutions to the credit of the
depository institution as fiduciary, without allocation of specific
amounts from a particular trust estate to an account in such
institution(s), the percentage interest of that trust estate in the
unallocated deposits in any institution in default is the same as that
trust estate's percentage interest in the entire commingled investment
pool.

(c) Limitation on applicability. This section shall not
apply to deposits of trust funds belonging to a trust which is
classified as a corporation under § 330.11(a)(2).

(a) General rule. Funds representing the
"non-contingent trust interest(s)" (as defined in § 330.1(m))
of a beneficiary deposited into one or more deposit accounts
established pursuant to one or more irrevocable trust agreements
created by the same settlor(s) (grantor(s)) shall be added together and
insured up to the SMDIA in the aggregate. Such insurance coverage shall
be separate from the coverage provided for other accounts maintained by
the settlor(s), trustee(s), or beneficiary(ies) of the irrevocable
trust(s) at the same insured depository institution. Each "trust
interest" (as defined in § 330.1(r)) in any irrevocable trust
established by two or more settlors shall be deemed to be derived from
each settlor pro rata to his or her contribution to the trust.

(b) Treatment of contingent trust interests. In the case
of any trust in which certain trust interests do not qualify as
non-contingent trust interests, the funds representing those interests
shall be added together and insured up to the SMDIA in the aggregate.
Such
insurance coverage shall be in
addition to the coverage provided for the funds representing
non-contingent trust interests which are insured pursuant to paragraph
(a) of this section.

(c) Commingled accounts of bankruptcy trustees. Whenever
a bankruptcy trustee appointed under Title 11 of the United States Code
commingles the funds of various bankruptcy estates in the same account
at an insured depository institution, the funds of each Title 11
bankruptcy estate will be added together and insured up to the SMDIA,
separately from the funds of any other such estate.

(a) "Pass-through" insurance. Any deposits of an employee
benefit plan in an insured depository institution shall be insured on a
"pass-through" basis, in the amount of up to the SMDIA for the
non-contingent interest of each plan participant, provided the rules in
§ 330.5 are satisfied. Deposits eligible for coverage under paragraph
(b)(2) of this section that also are deposits of a employee benefit
plan or deposits of an deferred compensation plan described in section
457 of the Internal Revenue Code of 1986 (26 U.S.C. 457) in an insured
depository institution shall be insured on a "pass-through" basis
in the amount of $250,000 for the non-contingent interest of each plan
participant, provided the rules in § 330.5 are satisfied.

(b) Aggregation--(1) Multiple plans. Funds
representing the non-contingent interests of a beneficiary in an
employee benefit plan, or eligible deferred compensation plan described
in section 457 of the Internal Revenue Code of 1986 (26 U.S.C. 457),
which are deposited in one or more deposit accounts shall be aggregated
with any other deposited funds representing such interests of the same
beneficiary in other employee benefit plans, or eligible deferred
compensation plans described in section 457 of the Internal Revenue
Code of 1986, established by the same employer or employee
organization.(2) Certain retirement accounts. Deposits in an insured depository
institution made in connection with the following types of retirement
plans shall be aggregated and insured in the amount of up to $250,000
per participant:

(i) Any individual retirement account described in section 408(a)
of the Internal Revenue Code of 1986 (26 U.S.C. 408(a));

(ii) Any eligible deferred compensation plan described in section
457 of the Internal Revenue Code of 1986 (26 U.S.C. 457); and

(iii) Any individual account plan defined in section 3(34) of the
Employee Retirement Income Security Act (ERISA) (29 U.S.C. 1002) and
any plan described in section 401(d) of the Internal Revenue Code of
1986 (26 U.S.C. 401(d)), to the extent that participants and
beneficiaries under such plans have the right to direct the investment
of assets held in individual accounts maintained on their behalf by the
plans.

(c) Determination of interests--(1) Defined
contribution plans. The value of an employee's non-contingent
interest in a defined contribution plan shall be deemed to be the
employee's account balance as of the date of default of the insured
depository institution, regardless of whether said amount was derived,
in whole or in part, from contributions of the employee and/or the
employer to the account.

(2) Defined benefit plans. The value of an employee's
non-contingent interest in a defined benefit plan shall be deemed to be
the present value of the employee's interest in the plan, evaluated in
accordance with the method of calculation ordinarily used under such
plan, as of the date of default of the insured depository institution.

(3) Amounts taken into account. For the purposes of
applying the rule under paragraph (b)(2) of this section, only the
present vested and ascertainable interests of each participant in an
employee benefit plan or "457 Plan," excluding any remainder
interest created by, or as a result of, the plan, shall be taken into
account in determining the amount of deposit insurance accorded to the
deposits of the plan.

(d) Treatment of contingent interests. In the event that
employees' interests in an employee benefit plan are not capable of
evaluation in accordance with the provisions of
this section, or an account
established for any such plan includes amounts for future participants
in the plan, payment by the FDIC with respect to all such interests
shall not exceed the SMDIA in the aggregate.

(e) Overfunded pension plan deposits. Any portion of an
employee benefit plan's deposits which is not attributable to the
interests of the beneficiaries under the plan shall be deemed
attributable to the overfunded portion of the plan's assets and shall
be aggregated and insured up to the SMDIA, separately from any other
deposits.

(f) Definitions of "depositor", "employee
benefit plan", "employee organization" and
"non-contingent interest". Except as otherwise
indicated in this section, for purposes of this section:

(1) The term depositor means the person(s)
administering or managing an employee benefit plan.

(2) The term employee benefit plan has the same
meaning given to such term in section 3(3) of the Employee Retirement
Income Security Act of 1974 (ERISA) (29 U.S.C. 1002) and includes any
plan described in section 401(d) of the Internal Revenue Code of 1986.

(3) The term employee organization means any labor
union, organization, employee representation committee, association,
group, or plan, in which employees participate and which exists for the
purpose, in whole or in part, of dealing with employers concerning an
employee benefit plan, or other matters incidental to employment
relationships; or any employees' beneficiary association organized for
the purpose, in whole or in part, of establishing such a plan.

(4) The term non-contingent interest means an interest
capable of determination without evaluation of contingencies except for
those covered by the present worth tables and rules of calculation for
their use set forth in § 20.2031--7 of the Federal Estate Tax
Regulations (26 CFR 20.2031--7) or any similar present worth or life
expectancy tables as may be published by the Internal Revenue Service.

(a) Extent of insurance coverage--(1) Accounts of
the United States. Each official custodian of funds of the United
States lawfully depositing such funds in an insured depository
institution shall be separately insured in the amount of:

(i) Up to the SMDIA in the aggregate for all time and savings
deposits; and

(ii) Up to the SMDIA in the aggregate for all demand deposits.

(2) Accounts of a state, county, municipality or political
subdivision. (i) Each official custodian of funds of any state of
the United States, or any county, municipality, or political
subdivision thereof, lawfully depositing such funds in an insured
depository institution in the state comprising the public unit or
wherein the public unit is located (including any insured depository
institution having a branch in said state) shall be separately insured
in the amount of:

(A) Up to the SMDIA in the aggregate for all time and savings
deposits; and

(B) Up to the SMDIA in the aggregate for all demand deposits.

(ii) In addition, each such official custodian depositing such
funds in an insured depository institution outside of the state
comprising the public unit or wherein the public unit is located, shall
be insured in the amount of up to the SMDIA in the aggregate for all
deposits, regardless of whether they are time, savings or demand
deposits.

(3) Accounts of the District of Columbia. (i) Each
official custodian of funds of the District of Columbia lawfully
depositing such funds in an insured depository institution in the
District of Columbia (including an insured depository institution
having a branch in the District of Columbia) shall be separately
insured in the amount of:

(A) Up to the SMDIA in the aggregate for all time and savings
deposits; and

(B) Up to the SMDIA in the aggregate for all demand deposits.

(ii) In addition, each such official custodian depositing such
funds in an insured depository institution outside of the District of
Columbia shall be insured in the amount of
up to the SMDIA in the aggregate for all deposits,
regardless of whether they are time, savings or demand deposits.

(4) Accounts of the Commonwealth of Puerto Rico and other
government possessions and territories. (i) Each official
custodian of funds of the Commonwealth of Puerto Rico, the Virgin
Islands, American Samoa, the Trust Territory of the Pacific Islands,
Guam, or The Commonwealth of the Northern Mariana Islands, or of any
county, municipality, or political subdivision thereof lawfully
depositing such funds in an insured depository institution in Puerto
Rico, the Virgin Islands, American Samoa, the Trust Territory of the
Pacific Islands, Guam, or The Commonwealth of the Northern Mariana
Islands, respectively, shall be separately insured in the amount of:

(A) Up to the SMDIA in the aggregate for all time and savings
deposits; and

(B) Up to the SMDIA in the aggregate for all demand deposits.

(ii) In addition, each such official custodian depositing such
funds in an insured depository institution outside of the commonwealth,
possession or territory comprising the public unit or wherein the
public unit is located, shall be insured in the amount of up to the
SMDIA in the aggregate for all deposits, regardless of whether they are
time, savings or demand deposits.

(5) Accounts of an Indian tribe. Each official
custodian of funds of an Indian tribe (as defined in 25 U.S.C.
1452(c)), including an agency thereof having official custody of tribal
funds, lawfully depositing the same in an insured depository
institution shall be separately insured in the amount of:

(i) Up to the SMDIA in the aggregate for all time and savings
deposits; and

(ii) Up to the SMDIA in the aggregate for all demand deposits.

(b) Rules relating to the "official
custodian"--(1) Qualifications for an "official
custodian". In order to qualify as an "official
custodian" for the purposes of paragraph (a) of this section, such
custodian must have plenary authority, including control, over funds
owned by the public unit which the custodian is appointed or elected to
serve. Control of public funds includes possession, as well as the
authority to establish accounts for such funds in insured depository
institutions and to make deposits, withdrawals, and disbursements of
such funds.

(2) Official custodian of the funds of more than one public
unit. For the purposes of paragraph (a) of this section, if the
same person is an official custodian of the funds of more than one
public unit, he or she shall be separately insured with respect to the
funds held by him or her for each such public unit, but shall not be
separately insured by virtue of holding different offices in such
public unit or, except as provided in paragraph (c) of this section,
holding such funds for different purposes.

(3) Split of authority or control over public unit
funds. If the exercise of authority or control over the funds of a
public unit requires action by, or the consent of, two or more
officers, employees, or agents of such public unit, then they will be
treated as one "official custodian" for the purposes of this
section.

(c) Public bond issues. Where an officer, agent or
employee of a public unit has custody of certain funds which by law or
under a bond indenture are required to be set aside to discharge a debt
owed to the holders of notes or bonds issued by the public unit, any
deposit of such funds in an insured depository institution shall be
deemed to be a deposit by a trustee of trust funds of which the
noteholders or bondholders are pro rata beneficiaries, and the
beneficial interest of each noteholder or bondholder in the deposit
shall be separately insured up to the SMDIA.

(d) Definition of "political subdivision". The
term "political subdivision" includes drainage, irrigation,
navigation, improvement, levee, sanitary, school or power districts,
and bridge or port authorities and other special districts created by
state statute or compacts between the states. It also includes any
subdivision of a public unit mentioned in paragraphs (a)(2), (a)(3) and
(a)(4) of this section or any principal department of such public unit:

(1) The creation of which subdivision or department has been
expressly authorized by the law of such public unit;

(2) To which some functions of government have been delegated by
such law; and

(3) Which is empowered to exercise exclusive control over funds
for its exclusive use.

(a) Separate insurance coverage. From December 31, 2010,
through December 31, 2012, a depositor's funds in a
"noninterest-bearing transaction account" (as defined in
§ 330.1(s)) are fully insured, irrespective of the SMDIA. Such
insurance coverage shall be separate from the coverage provided for
other accounts maintained at the same insured depository institution.

(b) Certain swept funds. Notwithstanding its normal
rules and procedures regarding sweep accounts under 12 CFR § 360.8,
the FDIC will treat funds swept from a noninterest-bearing transaction
account to a noninterest-bearing savings deposit account as being in a
noninterest-bearing transaction account.

(c) Disclosure and notice requirements--

(1) By no later than February 28, 2011, each depository
institution that offers noninterest-bearing transaction accounts must
post prominently the following notice in the lobby of its main office,
in each domestic branch and, if it offers Internet deposit services, on
its Web site.

All funds in a "noninterest-bearing transaction account"
are insured in full by the Federal Deposit Insurance Corporation from
December 31, 2010, through December 31, 2012. This temporary unlimited
coverage is in addition to, and separate from, the coverage of at least
$250,000 available to depositors under the FDIC's general deposit
insurance rules.

The term "noninterest-bearing transaction
account" includes a traditional checking account or demand deposit
account on which the insured depository institution pays no interest.
It also includes Interest on Lawyers Trust Accounts ("IOLTAs").
It does not include other accounts, such as traditional checking or
demand deposit accounts that may earn interest, NOW accounts, and
money-market deposit accounts.

(2) Institutions participating in the FDIC's Transaction
Account Guarantee Program on December 31, 2010, must provide a notice
by mail to depositors with negotiable order of withdrawal accounts that
are protected in full as of that date under the Transaction Account
Guarantee Program that, as of January 1, 2011, such accounts no longer
will be eligible for unlimited protection. This notice must be provided
to such depositors no later than December 31, 2011.

(3) If an institution uses sweep arrangements, modifies the terms
of an account, or takes other actions that result in funds no longer
being eligible for full coverage under this section, the institution
must notify affected customers and clearly advise them, in writing,
that such actions will affect their deposit insurance coverage.

This interpretive rule describes certain payments that are not
deemed to be "interest" as defined in § 330.1(k).

(a) Premiums, whether in the form of merchandise, credit, or cash,
given by a bank to the holder of a deposit will not be regarded as
"interest" as defined in § 330.1(k) if:

(1) The premium is given to the depositor only at the time of the
opening of a new account or an addition to an existing account;

(2) No more than two premiums per deposit are given in any
twelve-month interval; and

(3) The value of the premium (in the case of merchandise, the
total cost to the bank, including shipping, warehousing, packaging, and
handling costs) does not exceed $10 for a deposit of less than $5,000
or $20 for a deposit of $5,000 or more.

(b) The costs of premiums may not be averaged.

(c) A bank may not solicit funds for deposit on the basis that the
bank will divide the funds into several accounts for the purpose of
enabling the bank to pay the depositor more than two premiums within a
twelve-month interval on the solicited funds.

(d) The bank must retain sufficient information for examiners to
determine that the requirements of this section have been satisfied.

(e) Notwithstanding paragraph (a) of this section, any premium that
is not, directly or indirectly, related to or dependent on the balance
in a demand deposit account and the duration of the account balance
shall not be considered the payment of interest on a demand deposit
account and shall not be subject to the limitations in paragraph (a) of
this section.